House OKs measure to raise employee contribution to retirement

The House on May 10 passed a budget reconciliation package that includes a measure to require federal employees to pay an additional 5 percent of salary toward retirement.

By FederalSoup Staff

May 10, 2012

The House on May 10 passed a budget reconciliation package that includes a measure to require federal employees to pay an additional 5 percent of salary toward retirement. The increase would be phased in over five years, starting in 2013. The Sequester Replacement Reconciliation Act of 2012 (H.R. 5652) passed on a vote of 218 to 199.

The bill also would require new federal employees who are hired after 2012 and have fewer than five years of previous federal service to immediately begin paying 5.8 percent of salary toward retirement. Additionally, the bill would eliminate the annuity supplement for employees hired after 2012 who retire before they are eligible for Social Security.

Federal Employees Retirement System employees currently contribute 0.8 percent of salary toward a defined benefit pension, and 6.2 percent to Social Security. Civil Service Retirement System employees currently contribute 7 percent toward a defined benefit plan.

National Treasury Employees Union President Colleen Kelley issued a statement after the bill’s passage condemning the measure. “The latest budget measure pushed by House leadership assaults Americans’ sense of fairness by undercutting vital services and singling out middle-class federal employees to yet again foot the bill,” Kelley stated.

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